AMERICAN and global markets have responded positively to US Treasury Secretary Tim Geithner's much anticipated programme aimed at buying up hundreds of billions of dollars worth of 'toxic' assets currently on the books of US banks.

But will it be enough to save Mr Geithner's own neck? When he first mooted the plan, his wooden delivery and the lack of specifics caused the Dow to fall about 300 points on Feb 10.

The Obama administration's leading economic policymaker has come under more pressure since then over the bonuses that were granted to American International Group (AIG) executives. There have been calls for him to step down.

And although President Barack Obama has reiterated his confidence in Mr Geithner, the threat of a rising populist fury undermining his efforts to resuscitate Wall Street might have forced him to ask his Treasury chief to resign.

But then came Monday's announcement by Mr Geithner of the creation of the Public-Private Investment Program (PPIP), which ignited a surge on Wall Street that sent stock markets up about 7 per cent.

There is a good chance that the plan could be sold to lawmakers in Congress since it involves the use of US$75 billion to US$100 billion of existing TARP (Troubled Assets Relief Program) capital and does not call for raising new funds from taxpayers (yet!). In fact, there is a good chance that taxpayers would even make some profit in the process.

All of this clearly amounted to a piece of good news for the beleaguered Treasury secretary, raising new speculation that Mr Geithner would remain in office. Who knows? Perhaps his new plan will succeed in getting all those bad assets off banks' balance sheets, helping to (finally!) loosen up the credit markets, encouraging banks to start lending money again, and creating the conditions for economic recovery down the road.

But if it sounded too good to be true, it probably was, especially when one considers the sour mood on Capitol Hill, where lawmakers are aware that the public remains hostile to the idea of risking taxpayer money to help what they perceive to be greedy and corrupt executives on Wall Street.

And the plan does indeed put taxpayer money at risk, especially if the bad mortgages that have to be sold in auctions lose money and the government through the Federal Deposit Insurance Corporation (FDIC) has to repay the loans for the PPIP it guaranteed earlier.

At the same time, while private investors may be intrigued by the prospect of earning returns without taking major risks, many of them have expressed concerns in the aftermath of the fury over the AIG bonuses and the bill approved last week by Congress to tax compensation at AIG; they worry that Washington would attempt to appease voters again by changing the rules of investment and even the terms of the PPIP deals if investors are perceived by the public as making too much money in the process.

Moreover, in addition to the possibility of public outrage over the costs and the risks involved in the programme and the anxiety among investors over the 'politicisation' of the process, no one is really sure whether the plan is practical - as a process that is supposed to make it possible for sellers and buyers to agree on the 'real' market prices of the toxic assets and to eventually make deals and 'cleanse' the banks, and whether the banks will return eventually to their business of lending money.

If that happens, and the economy indeed rebounds, much of the populist fury will probably dissipate very quickly - and let Mr Geithner and his pals on Wall Street heave a big sigh of relief.

5. Michael Oren's op-ed piece in the Wall Street Journal on November 16 which is only accessible to subscribers. So here are a few interesting quotes:Much like 1967, Israel faces a Middle Eastern leader who has repeatedly sworn to wipe it off the map, and to that end is assiduously trying to acquire nuclear weapons. Like Nasser, Mahmoud Ahmadinejad can cripple Israel economically by keeping it in a state of alert, driving away foreign investment and tourism. In the absence of internationa…

A global affairs analyst, journalist, blogger, and author. I am a senior analyst at Wikistrat, teach political science at the University of Maryland, and cover Washington for the Singapore Business Times. I also write for Ha'aretz, blog at The Huffington Post, post commentaries on The National Interest, and am a contributing editor at The American Conservative.
Formerly a research fellow in at the Cato Institute and the United Nations correspondent for the Jerusalem Post, I have published in American and international newspapers and magazines, and have been affiliated with think tanks and academic institutions.
I authored "Quagmire: America in the Middle East" (Cato Institute, 1992) and of "Sandstorm: Policy Failure in the Middle East" (Palgrave Macmillan, 2005).
I have a Ph.D. in international relations from American University, and graduated from Columbia University with MA degrees from the schools of journalism and international affairs and a certificate from the Middle East Institute. I also graduated with an MA degrree in communication and received a BA degree in political science from Hebrew University.